Correlation Between Energisa and Profarma Distribuidora
Can any of the company-specific risk be diversified away by investing in both Energisa and Profarma Distribuidora at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Energisa and Profarma Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Profarma Distribuidora de, you can compare the effects of market volatilities on Energisa and Profarma Distribuidora and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Energisa with a short position of Profarma Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Profarma Distribuidora.
Diversification Opportunities for Energisa and Profarma Distribuidora
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energisa and Profarma is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Profarma Distribuidora de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profarma Distribuidora and Energisa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Energisa SA are associated (or correlated) with Profarma Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profarma Distribuidora has no effect on the direction of Energisa i.e., Energisa and Profarma Distribuidora go up and down completely randomly.
Pair Corralation between Energisa and Profarma Distribuidora
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Profarma Distribuidora. But the stock apears to be less risky and, when comparing its historical volatility, Energisa SA is 2.23 times less risky than Profarma Distribuidora. The stock trades about 0.0 of its potential returns per unit of risk. The Profarma Distribuidora de is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 311.00 in Profarma Distribuidora de on October 25, 2024 and sell it today you would earn a total of 298.00 from holding Profarma Distribuidora de or generate 95.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Energisa SA vs. Profarma Distribuidora de
Performance |
| Timeline |
| Energisa SA |
| Profarma Distribuidora |
Energisa and Profarma Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Profarma Distribuidora
The main advantage of trading using opposite Energisa and Profarma Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Profarma Distribuidora can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Profarma Distribuidora will offset losses from the drop in Profarma Distribuidora's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Profarma Distribuidora vs. Mills Estruturas e | Profarma Distribuidora vs. Tecnisa SA | Profarma Distribuidora vs. Odontoprev SA | Profarma Distribuidora vs. Positivo Tecnologia SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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